Gold Monitoring Thread £ GBP only

[stefffana]

10 minutes ago, James32 said:

Life is a stage..we're all actors. 

 

[Thelonerangershorse]

I'm going with back up to the £1850 - £1860 mark, then sideways for the rest of the week.

[jultorsk]

Media "highlight" of the week's going to be the Biden / Trump live debate on Thursday. Should be entertaining, to say the least.

  

[bobski]

25 minutes ago, jultorsk said:

Media "highlight" of the week's going to be the Biden / Trump live debate on Thursday. Should be entertaining, to say the least.

  

I want to see a bloodtest 

 

[Chronos]

"This Is Going To Be Far Worse Than The Great Depression...":

https://usawatchdog.com/no-way-financial-system-survives-bill-holter/

California Reveals All Job Gains In 2023 Were Fake:

https://www.zerohedge.com/economics/california-reveals-all-job-gains-2023-were-fake

Edited June 24 by Chronos

[HerefordBullyun]

https://www.zerohedge.com/markets/going-be-far-worse-great-depression

 63 banks that have more than 500 million losses!

How do you like them apples?

Edited June 24 by HerefordBullyun

[Thelonerangershorse]

12 hours ago, Thelonerangershorse said:

I'm going with back up to the £1850 - £1860 mark, then sideways for the rest of the week.

£1836.15

Shows what I know.

[Bratnia]

On 22/06/2024 at 20:18, Chronos said:

US debt moving toward $50 trillion isn’t whole story. As the real figure far exceeds that, Washington will make it easy for Global South states to sideline the dollar:

https://asiatimes.com/2024/06/us-debt-moving-toward-50-trillion-isnt-whole-story/

US sells debt to others, China etc. buy those Treasury's, perhaps one such case being a 10 year Treasury that pays 5% interest/year. When the US then prints/spends more dollars that income stream for China is deflated, China loses out - unless it prints more of its own currency to buy more US Treasury's to offset that loss. When others stop buying more US Treasury's they have US inflation (dollar debasement) exported onto themselves, the "Others" moving away from the US dollar could be a good thing for the US, borrowed/spent money in the past ... where that debt is eroded by inflation

The suggestion of a US $50Tn debt by the mid 1930's is if anything a conservative estimate/guess, more likely IMO is that level will be breached in the very eary 2030's

Looking at the US debt (a exponential function) using the correct log scaling ...

Russia/China/N Korea/Iran ...etc. opting for a financials war with the US (dropping using the Dollar) and they will lose out, America/Dollar will prevail. My guess is that the world will transition over to crypto/blockchain international trade settlements backed still in part by the US dollar but to a lower extent alongside gold and other currencies/assets.

De-dollarisation has been occurring for a few years now, the action of which has enabled US dollar/stocks to perform relatively well. The harder/faster that pace the greater the effect. China/Russia/N Korea/Iran ...etc. suckered in to thinking they're hurting their 'enemy' (US) whereas they're just shooting themselves in the foot (feet/legs/body).

[Gruff]

4 hours ago, HerefordBullyun said:

https://www.zerohedge.com/markets/going-be-far-worse-great-depression

 63 banks that have more than 500 million losses!

How do you like them apples?

And then you need to remember that the "central banks" are also carrying huge losses, these will all be paid off by taxing us more, for the greater good of course..

[CollectForFun]

4 hours ago, HerefordBullyun said:

https://www.zerohedge.com/markets/going-be-far-worse-great-depression

 63 banks that have more than 500 million losses!

How do you like them apples?

Just that that's not accurate (aside from that it's billion, not million) and really puts this zerohedge writer's ability to understand and interpret information into question.

Per the source article, $517 billion are unrealized losses for the US banking system as a whole. Out of all US banks, 63 were labelled as "problem banks." Total assets of these problem banks were $82 billion, so they must be quite small ones.

There are over 4,000 banks in the US and $82 billion of total assets is approximately the size of the 38th largest one.

[Bratnia]

On 22/06/2024 at 18:29, GoldDiggerDave said:

I was 100% mortgage and debt  free by 38 years old.  47 now not really worked for the last 5 years as my hobbies (coins) and other ventures cover my outgoings…….also just bought a house with gold.   

This (few years old now) BullionByPost chart https://www.bullionbypost.co.uk/index/gold/gold-real-estate-ratio/ suggests that the gold/house ratio is indicative of a reasonable ratio to be buying a house using gold.

Did you actually pay for the house using gold? I've suspected you could actually buy a house using gold - pay the deposit and settle the full payment via the conveyance solicitor using gold coins/bars (slap down 200 one ounce gold Britannia's (or whatever) on their table and ask for the receipt ) as the solicitor would be OK to manage all of that as it would just bump up their time/fee a little.

Coinbase account along with its debit card for daily spending purposes, two thirds of your wealth in two houses where one is rented, another third kept in gold (PaxOS PAXG gold holdings) - might generate similar overall total returns/rewards as if the rented home value were instead invested in stocks. i.e. you could get by without any regular bank account and/or without any bonds/cash deposits/stock brokerage accounts and not be using Pounds in any way other than as a relative price/value measure when it comes to shopping.

[Bratnia]

16 minutes ago, Gruff said:

And then you need to remember that the "central banks" are also carrying huge losses, these will all be paid off by taxing us more, for the greater good of course..

https://www.yieldgimp.com/gilt-yields

Marked to market, current cost to fully redeem Gilts at the present price/interest rates etc. is more just a figure. Most Gilts will be held to maturity and then that debt either repaid or a new replacement Gilt issued. For conventional Gilts, the debt is eroded by inflation and the BoE (Central Bank) pretty much only bought up Conventional Gilts, not index linked Gilts (that aren't eroded by inflation). When spaced out over many years ... such as out to 2073 as per the above link indicates for the longest Gilt series), that becomes just a matter of ongoing management, either rolling or repaying each individual Gilt series as it matures according to interest rates and how the economy is doing at that time. Usual business. Where taxes are only increased/lower according to how things are balancing out overall at any one time (year).

[Thelonerangershorse]

£1837.61

Where's @bobski?

[HonestMoneyGoldSilver]

On 23/06/2024 at 12:22, Bogart said:

" Next will be a very dark period in UK history with high taxes, high debt, poor leadership and political instability and hard times."

Will anybody notice a difference?

 

I don't buy into extremes at either end but I do see a strong possibility for a significant market correction (30-50%) and "Stagflation" is something we are already experiencing - slower growth, higher or growing unemployment, higher inflation (higher prices) and higher interest rates (inflation/prices/CCI) simultaneously

8 hours ago, Chronos said:

"This Is Going To Be Far Worse Than The Great Depression...":

https://usawatchdog.com/no-way-financial-system-survives-bill-holter/

California Reveals All Job Gains In 2023 Were Fake:

https://www.zerohedge.com/economics/california-reveals-all-job-gains-2023-were-fake

I was expecting a large recession in 2022 that never materialised, at least not officially. However when real inflation was > 10% and growth was pretty much 0%, that represented a large real-terms recession. I remember we used to focus more on "real-terms" rather than nominal. These days it seems like "real-terms" has been assigned to the history bin and recessions can be explained away by manipulating figures and spreading false information

The Great Depression was one of my areas of interest. If we gloss over the market crash and gold standard dynamic, the reason for the propagation of the GD was an increase in CCI (Cost of Credit Intermediation). Ben Bernanke wrote a paper on this in 1983 along with several other publications on banking crises, for which he was jointly awarded a Nobel Prize in 2022 (The 2022 Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel). Bernanke used this paper and others as the source material for the Fed (global) response to the GFC of 2008.

The general narrative for the next depression/recession being worse than the Great Depression, is that we've already learned the lessons of all previous recessions and used the tools and mechanisms we developed to combat their effects. The issue today is the opposite of Ursula von der Leyen's famous quote, "We have tools". Nope, we don't have tools, other than doing radical things such as interactions between the Treasury (Janet Yellen) and the Fed (Jerome Powell), with their magician's balancing act between various forms of QT and QE via open collusion (something that is illegal and has been historically avoided like the plague as it essentially turns the Fed into a political entity in cahoots with the Treasury, which is controlled by the incumbent Administration)

The problem is we're damned if we do and damned if we don't. We can re-use the tools we've deployed in the past or create new tools that are variations on the theme, however, unlike the GFC of 2008, these new tools can only do one thing - exacerbate inflation and pressure central banks to raise rates. Or alternatively we can cut rates, which will have the same net effect - exacerbate inflation and force central banks to raise rates. So we're basically on a knife-edge trying to manipulate some sort of "soft landing", which many, including the Fed, claim has already been achieved with the "hard landing" avoided. Yea right, tell it to the consumer and working man who are being skinned alive by a real-terms recession (aka cost of living crisis)

Having high inflation in the absence of higher rates is economically deplorable and politically unstable - it punishes the middle and upper classes by eroding the real terms value of their financial instruments/savings. It also plays havoc with international and government financing, as how can you sell a Treasury or Gilt at 1% yield if the market says the official inflation rate is 5% or 10%? If nobody buys the government bonds then the government can't raise funds to pay for expenditure, meaning "Japanification" is the only remaining solution - the central bank purchases the bonds issued by the government - i.e. the Fed (or BoE/BoJ) and Treasury collude to manipulate domestic and global markets. It works for Japan due to the demographics of Japan and their 40 year+ corporate, government and private investment plans. It would absolutely not work in the west, particularly the EU or USA (the largest markets with China in close 3rd), as American and European investors, unlike the Japanese, don't have a virtually infinite global investment market relative to their domestic markets that pays higher interest returns and provides growth opportunities

If governments are honest about the real rates of inflation and government bonds reflect this reality, then the cost of finance and debt servicing becomes excessively prohibitive. The general consensus is that beyond 7% it becomes virtually impossible for a developed country to grow fast enough to service its debts - hence the European sovereign debt crisis when some PIIGS yields were at or above 7%. If rates or bond yields exceed critical thresholds it would lead to economic collapse and sovereign defaults. If the USA or Europe collectively defaulted on their obligations it would unquestionably cause a financial crisis that would dwarf the Great Depression by orders of magnitude (CCI would spike off the charts, as per Bernanke, 1980s). 

So basically IMHO we are stuck with higher for longer rates that are below the real rate of inflation. The real-terms spending power of consumers is being eroded at a frightening pace including for pensioners on "inflation protected" plans (90%+ are not on inflation-protected plans, the 10% that are generally have limits of 3-5%)

It's a slow-motion collapse that can only be solved by real terms gains in productivity and economic output, something we struggle with in developed economies. It's possible that AI and technology will provide the boosts we need to keep our heads above water or even get ahead, but in the absence of productivity booms our economies have a shelf-life. In the 20th century we would just expand into developing markets. There are still some large and developing markets remaining - Africa and India - but most of the other markets have already experienced many of their available growth options, such as China. The absence of perpetual growth in the Chinese market means the west will struggle to achieve the growth we require to service out debts, public and private liabilities (healthcare, pensions, etc). The Chinese can no longer be relied upon and appear to have peaked demographically (they are currently on a decline similar to Japan or Germany according to some reports), and the economic star dust has well and truly run out (banking crises, property crises, environmental crises, dramatically rising social security liabilities, even a manufacturing crisis). China is experiencing large downward pressure in residential and commercial real estate for the first time in 50 years. 

Anyway, TL:DR from me as usual, my apologies. To avoid western economic collapse we have to experience a sustained and real terms rise in productivity or else we have to jointly benefit from developing and emerging markets (exploit them). The developing and emerging market delta to the west is narrowing and has narrowed in some cases (cost of labour in China is greater than the cost of labour in Mexico). Our productivity has stalled and is taking a hit from the communist ideologies of DEI/ESG along with a huge rise in economic inactivity due to health concerns/benefits - primarily those claiming mental health as a reason for not working and who are having their entire existence paid for by an ageing and shrinking tax base. In the absence of real terms productivity and economic expansion, the only way to service our liabilities is to expand the money supply and create more inflation (inflate away the debt and liabilities while destroying middle class living standards). This seems to be a ship so large it may never be turned around, which massively amplifies the requirement for all to hold real stores of energy and value such as physical gold and silver. 

(Bernanke's 1983 paper attached)

NON—MONETARY EFFECTS OF THE FINANCIAL CRISIS IN THE PROPAGATION OF THE GREAT DEPRESSION

This paper examines the effects of the financial crisis of the 1930s on the path of aggregate output during that period. Our approach is complementary to that of Friedman and Schwartz, who emphasized the monetary impact of the bank failures; we focus on non-monetary (primarily credit related) aspects of the financial sector--output link and consider the problems of debtors as well as those of the banking system. We argue that the financial disruptions of 1930-33 reduced the efficiency of the credit allocation process; and that the resulting higher cost and reduced availability of credit acted to depress aggregate demand. Evidence suggests that effects of this type can help explain the unusual length and depth of the Great Depression

Bernanke 1983.pdf

[Thelonerangershorse]

Wayyyyyy TL;DR

[Dankanugget]

5 minutes ago, Thelonerangershorse said:

Wayyyyyy TL;DR

Read it again 

[HonestMoneyGoldSilver]

6 minutes ago, Thelonerangershorse said:

Wayyyyyy TL;DR

It is relatively information-dense though if rather broad strokes. The Wayyyyyyyyy TL:DR version would be 20,000 + words, 50 charts and 200 references 😁

Strong narrative to buy gold and silver is the abridged version. Commodity super-cycle lasting several years

[Dankanugget]

Just now, HonestMoneyGoldSilver said:

It is relatively information-dense though if rather broad strokes. The Wayyyyyyyyy TL:DR version would be 20,000 + words, 50 charts and 200 references 😁

Thanks for the info a lot to take in.

[Paul]

Asking ChatGPT can be your friend when you paste over TL/DR posts by simply adding the prompt 

"can you break this down into the key ten bullet points, in language a 13 year old child would understand and not think was too long"

You get this 

• Expected Recession in 2022: I thought there would be a big recession in 2022, but it didn't officially happen. Even though prices were rising and the economy wasn't growing, it felt like a recession.

• Real vs. Nominal: We used to care more about the "real" value of things (adjusted for inflation) instead of just their face value. Now, it seems like people are ignoring the real value to avoid saying we're in a recession.

• The Great Depression: The Great Depression happened partly because it became very expensive and difficult to borrow money. An expert named Ben Bernanke studied this and won a big prize for his work.

• Tools for Recessions: We've learned from past recessions and have tools to fight them. But now, we might not have the right tools to deal with today's problems.

• Current Dilemma: If we use our tools from the past, we might make inflation worse. If we lower interest rates to help, it could also make inflation worse. We're trying to land softly without causing more problems, but it's tough.

• High Inflation Issues: High inflation without higher interest rates is bad. It hurts people’s savings and makes it hard for the government to borrow money. If the government can't borrow, it could lead to economic collapse.

• Government Bonds: If inflation is high but interest rates on government bonds are low, no one will buy them. This makes it hard for the government to raise money.

• Japan's Situation: Japan's economy handles this differently because of their unique situation. This strategy wouldn’t work well in the USA or Europe.

• Slow-Motion Collapse: We're in a slow decline that can only be fixed by making more stuff and becoming more productive. Without this, we might have to rely on developing countries for growth.

• The Future: If we don’t improve productivity, we'll keep creating more money and causing more inflation. This will hurt middle-class living standards. We should hold valuable things like gold and silver to protect ourselves.

 

[Chronos]

U.S. Budget Disaster Ahead Will Impoverish Americans:

https://www.dlacalle.com/en/u-s-budget-disaster-ahead-will-impoverish-americans/

We're Approaching The Debt Super-Cycle Endgame:

https://www.zerohedge.com/markets/hedge-fund-cio-were-approaching-debt-super-cycle-endgame

Debt-Brakes And Treaty-Requirements About To Smash The EU:

https://mishtalk.com/economics/debt-brakes-and-treaty-requirements-about-to-smash-the-eu/

[CDH]

"They have to kick the table over.  They cannot allow the table to fall over on its own because then there is going to be finger pointing."

This is my concern. The debt problem, particularly in the US, has built to such phenomenal proportions that they need an external catastrophe, like war, to blame for the inevitable collapse in living standards. And they'll engineer one if necessary. 

Edited June 24 by CDH

[Thelonerangershorse]

£1836.40

Seriously, Where's @bobski

[Darr3nG]

8 minutes ago, Thelonerangershorse said:

Where's @bobski

[BLOOMMAN101]

10 minutes ago, Thelonerangershorse said:

£1836.40

Seriously, Where's @bobski

Burnt out 😃

[BLOOMMAN101]